INSTITUTE OF CURRENT WORLD AFFAIRS )JV-I American Research Center in Egypt 2, Midan Kasr al-Doubara Garden City Cairo Apri 1986 EGYPT'S DEVELOPMENT AND MUBARAK'S INHERITANCE by Dr. Dirk J. Vandewalle It is almost five years since president Anwar Sadat was killed by Muslim extremists and Husni Mubarak assumed leadership over Egypt the Arab world's most populous country. With Sadat disappeared one of the last members of those who had actively participated in the coup that brought Gamal Abdul Nasser to power in 1952. Except for a few select holdovers from this "1952 Generation" their place in Egyptian politics is now being occupied by the "October Generation" the new men who fought the war against Israel in 1973. Demographics play an important part in understanding today's Egypt in more ways than one. Half of all Egyptians now alive were born after 1952. For them the revolution which once galvanized Egyptians and the Arab world alike no longer invokes the imagery and legitimacy it once held for Nasser's and Sadat's generation. Although Nasser remains a symbol he is often referred to here much in the same way as Americans talk about George Washington. Upon closer questioning few of Egypt's youngest generation know little about Nasser or what he stood for in the Arab world. Husni Mubarak both personally and symbolically marks a break with Egypt's most recent past. For Gamal Abdul Nasser and Anwar Sadat politics had been a lifelong passion. Mubarak has always been a professional soldier first a reluctant politician second. Throughout the political tumult of the early World War II post-war years he quietly pursued his studies at the Egyptian War College, became the commander of Cairo West air base and after the dismissal of his own senior officers in the wake of the 1967 war assumed the position of chief of staff of the air force. He seemed destined for a distinguished military career until to his own and others" surprise Anwar Sadat appointed him vice president in 1975. Dirk Vandewalle is the North Africa Fellow of the Institute of Current World Affairs. His interest is the political economy of Egypt and North Africa in particular the development strategies of Egypt Algeria Cibya, Tunisia and Morocco in the last two decades. Iubarak was forty-seven years old when his political career began. A plodding workaholic determined to leave his mark on Egyptian political life once he became part of it, he quickly consolidated his own power base within the government. By the time Sadat was killed, Mubarak had become thoroughly familiar with the political system and the day-to-day running of the country. He controlled the National Democratic Party and, as important in a country in which police control remains an important ingredient of power, the Supreme National Security Council. He promised to be what ohn Waterbury once called a on qrant someone who would manage Egypt's problems in a competent, albeit perhaps unimaginative, style. But it was seemingly that kind of leadership Egypt was in dire need of in the I780s. Mubarak's aim since coming to power has not been, as it was for Nasser and Sadat to refashion Egypt's economic character, but rather to cope with the formidable strains it must now labor under. lany of these bottlenecks result from his predecessors' experiments and I shall have quite a bit more to say about these lingering structural problems in my reports. The economic legacy of both former presidents casts a large shadow. In less than three decades Egypt has experimented successively with a socialist form of development in cooperation with the East and then, after Nasser's death in 1970 modified this approach in favor of development with the aid of Western capital and know-how. The modification was formally announced in 1974. It is usually referred to as in.film.h., translated either as liberalization or, perhaps less accurate since Egypt never completely cut itself off from foreign investment, as the =Open Door" policy. Whatever the translation, infitah was meant to attract private and western investment to the country and was an attempt to move away from the centralized economic decision making that existed under Nasser. Needless to say, this rapid change of approaches extracted an economic toll about which the Egyptian press academics, and policy makers still keep up heated debates. Only nominal economists contend that economic decisions can be neutral or value-free, and one suspects they have never been to any developing country or at least not to Egypt. The ruler ultimately includes in his choice a number of issues that include concerns far beyond economic inclinations. Both Nasser's socialism and Sadat's infitah were in effect strong ideological expressions which in turn created circles of support and opposition and refashioned (or were shaped by) the political arena. What is often referred to as the =cruel dilemmas of development" hint at these issues beyond economics. Ultimately the choice of economic policy in Egypt as well as the choice of superpower to support this choice, touches upon internal social relations, the lives and fates of the Egyptian population involved (or as the case might be, no___t involved). Nasser and Sadat chose conscientiously for what they perceived to be in the ultimate interest of Egypt, and their speeches invariably reflect the view that their economic policies no matter how radically different they turned out to be would lead to social justice and equity. One shouldn't belittle these efforts, nor always accept them at face value. As hope to show, the story of development in Egypt as elsewhere includes a number of economic gaffes, political intrigues, outright corruption and venality, and a generous dose of political propaganda. 1::)5v By sheer size, geographical position, population, and cultural hegemony, Egypt has played an important (although initially isolated) role in the Arab world since the West intruded upon the Middle East in the 19th century. Its cultural predominance, literary and liberal ambitions, and an economy relatively sophisticated for the area and time period, had produced a feeling of preeminence among Egyptian elites. Egypt rejected Arab nationalism initially in favor of a more Egyptian nationalism, in part because its leaders felt that the Arab nationalism that engulfed the Middle East at the time was parochial and often subservient to the West. Not until 1945 and the creation of the Arab League did Egyptian nationalism blend with a more regional Arab nationalism. It was a movement Egypt was bound to lead, and whose presence shaped its direction and content in crucial ways. From then on the concern over Egypt's position in any New Arab Order has remained of great concern to Egypt and the other Arab countries alike. If observers, disagree on the creation, endurance, and demise of these elusive New Arab Orders, there seems to be little disagreement that in any such creation Egypt's role will be crucial. The creation of the Arab League in 1945, the Egyptian revolution of 1952, the Bandung conference of 1955, the political experiments of the 1960s within the Middle East, the Ramadan war of 1973 and, above all, the OPEC period during the 1970s all were interpreted to mark a turning point for the Arab world and for its role internationally. The I770s in particular, with their abundant wealth and the accumulation of billions of petrodollars, produced a euphoria that the Middle East now truly had the means to transform itself into a new Camelot. Sadat's infitah policies were in part an effort to profit from this new reality. He hoped that a combination of Arab capital, #lestern technology, and Egyptian manpower would propel his country once more into becoming a powerhouse for the region. What Sadat hoped for in essence was the creation of another New Arab Order in which his country would once again play a leading role. But in the 1970s the initiative seemingly slipped into the hands of the oil states as Egypt became the pauperized, patronized and after the CampDavid agreements, ostracized poorer cousin of the region. = The early part of this story has been recounted by George Antonius, one of ICWA's earlier fellows. His book, The Arab Awakeninq_ (London: Hamilton, 1938 various reprints) remains important for the early history of the Arab national movement. It was dedicated to Charles Crane. 2 Not surprisingly, one of the better books that appeared in the early 1980s on Egypt and its potential new role in the Middle East, carried as its subtitle "Egypt and the New Arab Order." And not surprisingly either, only four years after its publication, many of the options, prescriptions, and analyses offered by some o/ its contributors to confirm the beginning of this new order have already been negated by the rapid change of events in the region. Malcolm H. Kerr and El Sayed Yassin, Ric.h..a.n.d_.Lo.pr States in the Middle East. Eqvot and the New Arab Order (Cairo: University of Cairo Press, 1982). D3v But by the early 1980s this self-proclaimed New Arab Order had proven as elusive as its precursors, wracked by internal disagreements and international economic pressures. The global recession after 1980, and a number of assorted ills indicated how fragile it had been. Host of the oil-exporting countries, with perhaps Libya remaining as the last great spender of petrodollars, started to retrench. Private sectors who until then had been neglected, were given a new lease on life. Reserves dropped precipitously. The unity of OPEC, fragile at the best of times now unravelled slowly as Saudi Arabia was no longer willing (and able) to guide the organization and defection seemed to offer the greatest potential for reaping diminishing benefits.